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5. Problem 9.05 (Corporate Valuation) eBook Scampini Technologies is expected to generate $50 million in free cash flow next

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Answer #1

Current total value=Free cash flow for next period/(WACC-Growth rate)

=50/(0.13-0.08)

=1000 million

Value of common stock=Current total value/Shares of stock outstanding

=1000/55

=$18.18(Approx).

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